Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 17.5%. Since the same quarter one year prior, revenues rose by 28.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.15% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CYD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 15.3% when compared to the same quarter one year prior, going from $35.99 million to $41.49 million.
China Yuchai International Limited, through its subsidiaries, manufactures and sells diesel and natural gas engines primarily in the People's Republic of China (PRC). It operates in two segments, Yuchai and HLGE. China Yuchai International has a market cap of $821.8 million and is part of the industrial goods sector and industrial industry. Shares are up 3% year to date as of the close of trading on Friday.
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